for 20 years, reporting on the business of the computer-aided design industry

Sunday, April 15, 2018

What Nemetschek Is Doing

Issue #976

by Ralph Grabowski with Sean Flaherty

After being at Vectorworks for a long time, Sean Flaherty is now chief strategy officer at Germany's Nemetschek Group. Nemetschek originally was a software company that developed Allplan, a CAD system for architects that first ran on Unix-based computers. Its popularity today continues primarily in Europe.

Now the company's name refers to a German holding company that owns 15 independently-run software companies specializing in AEC. (See figure 1.) They produce software in areas of design, analysis, collaboration, and construction.

Figure 1: Brands held by Nemetschek

Nemetschek runs without a CEO [chief executive officer]. Mr. Flaherty is part of a three-man board running the firm: (1) himself as CSO, (2) a chief financial and operations officer, and (3) a BIM strategy officer.

He spoke last week with upFront.eZine via GoToMeeting:

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We are working to improve how Nemetschek is known. Outside of Europe, it is not well known. We switched from a financial holding company in AEC to a strategic holding company that allows its brands to run independently. A new thing is that 1-2% of profits are taken for strategic projects, such as multi-product solution workflows.

The biggest change is that our position in USA is different from five years ago. USA and Germany now have equal market shares, about 30%, whereas USA used to have less than 10%, and this year could surpass Germany. We now have more than 800 employees working in the USA, more than in Germany, and we established a second headquarters in the USA, in Washington, DC. [The other is in Munich, Germany.]

We used to be known in the USA only for Vectorworks, Graphisoft[ArchiCAD, the original BIM software], and Maxon [3D rendering and animation]. But we have made acquisitions that have changed our footprint. We have locked down the structural market with Risa for analysis and SDS2 for steel design. (See figure 2.) We can go all the way from modeling to construction -- both steel with steel, and steel with concrete. Construction management is handled by Bluebeam.

Figure 2: Steel connection design with SDS2 (image source SDS2)

The big problem is solved: everyone now has modeling techniques. So, the problem now is how to connect them into workflows. For us, these are the three big ones:

Architecture is pretty far ahead in BIM

Structural is the most disconnected of the major disciplines

Collaboration is hot

Q&A

Ralph Grabowski: Your recent press release calls Nemetschek the #2 firm in BIM. Who is #1, and do you consider Bentley Systems (which has larger revenues than Nemetschek) to be in BIM?

Sean Flaherty: Autodesk is still the leader, dollar-wise at around $880 million in AEC; we are closing in at $500 million. And we think Trimble is smaller than us in software sales; they make more money from selling hardware.

Bentley used to be substantial in architecture, but plant and civil is their core now. We see them more in the collaboration side, rather than in BIM.

Grabowski: Nemetschek plans to grow revenues by 50% by 2020. How does it plan to do this?

Flaherty: Our growth over the last four years averaged 20% a year. We are the best performing software vendor in AEC.

Often companies can grow too large and become inefficient, and so middle-size firms are seen to produce the highest quality goods. Our holding company structure is like that: it consists of component firms that are in the $30-$100 million range and the best in the field. They operate best as medium-size, independent companies that have their own [fiscal] targets.

Grabowski: There was a rumor late last year that Vectorworks would be spun off to an investment company. Any truth to this?

Flaherty: Definitely not. Because we are a holding company, investment firms might get confused that we are available. We are in fact looking for acquisitions in AEC, particularly on the structural and collaboration side.

Grabowski: Three years after Bluebeam was acquired, its capabilities were finally integrated into Vectorworks, albeit through Vectorworks Cloud Services. Why the long delay?

Flaherty: We did have a connection between the two through PDF-export for markups, but what is new is that we are doing it at the server level. We are going to connect all of our products that produce documents, which is most of them, to Bluebeam. (See figure 3.) Bluebeam technology will be the basis of our document and process CDE [common data environment].

Figure 3: Revu software from Bluebeam (image source Bluebeam)

We are now going for UK BIM Level 2 which is all about digital workflows -- AEC design and construction firms can no longer print or email documents. (Level 3 is sharing models live.) I like that, because I consider the UK BIM requirements to be among the most achievable in the world. I think it is a lighthouse market for the rest of the world, and so it makes sense for us to adopt it, because it will probably become the standard elsewhere.

Viewing and measuring features of ARES Touch are FREE for all users. ARES subscribers gain premium features like editing and photo annotation. Get a free 30-day trial of ARES Touch's premium features when you activate your free trial of ARES Commander at www.graebert.com/arescommander

Orthograph also extended their software to the Web browser, with Orthograph Cloud featuring a 3D web viewer, real estate datasheet, and API integration with external systems.

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Design a range extender (i.e., 7th axis) for a Universal Robots UR10 robot to do a dual palletizing operation, and maybe win $1,000 from Vention_io. www.vention.io/blogs/48

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Applied Software has partnered with ManufactOn to provide tracking of prefab and regular material handling through mobile and Web. Applied Software's eVolve is a Revit add-on for electrical prefabrication workflows.www.asti.com/manufacton

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Rakesh Rao of DesignSense Software Technologies told me about this video "about the entrepreneurial spirit of a small town called Belgaum in India." It's the story of entrepreneurs working when government wouldn't. (The CAD software you see is @Solidworks.)rakeshrao.typepad.com/work_smarter_geotools

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VI-grade is pleased that Mercedes AMG chose their new motion platform DiM250 (Driver-in-Motion) equipped with an AMG car cockpit to virtually optimize dynamic behavior of all passenger vehicles developed and marketed by Mercedes-AMG. www.vi-grade.com/

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OPTIS WORLD VRXperience joins with EB Automotive EB arware to virtually drive with AR HUD: pedestrians, road signs, and other vehicles detected by car’s sensors are superimposed on the road via the windshield display. www.optis-world.com

UPFRONT.EZINE (@upFronteZine): Apple never cared much for the special requirements of CAD users, such as direct access to the (undocumented) graphics board.

Anthony Frausto (@architosh): So true. And associate editor, Akiko Ashley, would jump all over that comment too. She has been the voice of reason and sound criticism about Apple's pro hardware/software for years now at Architosh.

For late-breaking CAD news, follow upFront.eZine on Twitter at @upfrontezine.

Letters to the Editor

Re: Autodesk Wants to Be Your Dassault

Good title! - Etienne Lacroix, ceo Vention.cc

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You wrote, "This model is suitable for large corporations and some startups, but the direction is an on-going concern for Autodesk customers who do 2D drafting with software on permanent licenses.“

I can see products like Trimble SketchUp or SmartDraw becoming the go-to for small organizations and single-person businesses when they finally decide to stop keeping old workstations around to run old software.

Autodesk, Dassault, Bentley, et al are after the data-pile in the way that Facebook is. It creates a very powerful data-pile of very timely trends, which is vastly easier to harvest from the cloud. What do the data management agreements look like? - Greg Hruby

The editor replies: Other ones include the free Draftsight for 2D, and the free Bricsys Shape for 3D. It would be interesting to peruse the data management agreements for issues of data ownership and possible denial of liability.

Thank You, Readers!

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